NATIONAL INSTITUTE OF SECURITIES MARKETS

An Educational Initiative by SEBI

Curriculum
NISM-Series-VIII: VIII: Equity Derivatives Certification Examination I. Basics of Derivatives A. Basics of derivatives B. Evolution of derivatives m market C. Indian derivatives erivatives Market D. Market participants E. Types of derivatives erivatives market markets F. Significance of derivatives erivatives G. Various risk faced by the participants in derivatives II. Understanding Index A. Introduction to Index B. Significance and economic purpose of Index C. Types of Indices D. Attributes of an Index and concept of impact cost E. Index management F. Major Indices in India G. Applications of Index III. Introduction to Forward Forwards and Futures A. Introduction to Forwards and Futures contracts B. Payoff Charts for Futures contract C. Futures pricing Cash and carry / Non-arbitrage arbitrage model for futures pricing Expectancy model of futures pricing Concept oncept of convergence of cash and futures prices D. Basic differences in Commodity, Equity and Index Futures E. Uses of futures Role ole of different players in futures market Use se of futures contract as an effective instrument for managing risk Strategies trategies for hedging, speculation and arbitrage in futures market IV. Introduction to Options A. Basics of options B. Payoff Charts for Options C. Basics of options pricing and option Greeks Fundamentals of options ptions pricing Overview verview of Binomial and Black-Scholes option pricing models Basics of Option Greeks D. Uses of Options

NISM-Series-VIII: VIII: Equity Derivatives Certification Examination

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NATIONAL INSTITUTE OF SECURITIES MARKETS

An Educational Initiative by SEBI
V. Option Trading Strategies A. Option spreads and their payoff charts B. Straddle: market view and payoff charts C. Strangle: : market view and payoff charts D. Covered Call: : market view and payoff charts E. Protective Put: : market view and payoff charts F. Collar: : market view and payoff charts G. Butterfly spread: : market view and payoff charts VI. Introduction to Trading Systems A. Trading Systems, s, corporate hierarchy, order types and conditions B. Selection criteria of Stock for trading C. Selection criteria of Index for trading D. Adjustments for Corporate Actions E. Position Limits F. Using daily newspapers to track futures and options VII. Introduction to Clearing and Settlement system A. Clearing Members, their ir role and eligibility norms B. Clearing Mechanism and computation of open positions C. Settlement Mechanism for stock and index futures and options D. Understanding margining and mark to market under SPAN E. Risk Management features and position limits VIII. Legal and Regulatory Environment A. Securities Contract (Regulation) Act, 1956 B. Securities and Exchange Board of India Act, 1992 C. Important rules and regulation egulations in derivatives trading D. Regulation in clearing & s settlement and risk management E. Major ajor recommendations of the L C Gupta Committee F. Major ajor recommendations of the J R Verma Committee IX. Accounting and Taxation A. Accounting ccounting of Futures and Options contracts B. Taxation of Derivative transaction in securities X. Sales Practices and Investors Protection Services A. Risk profile of the investors Importance mportance of profiling clients in sales process Importance of KYC Documents ocuments required by the investors to trade in Derivatives contract Best practices in derivatives sales B. Investors Grievance Mechanism

NISM-Series-VIII: VIII: Equity Derivatives Certification Examination

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